AGI glaspac to set up 2nd plant in Hyd

The Rs 210 crore facility to go onstream in the first quarter of 2009.

AGI glaspac, the strategic business unit of Hindustan Sanitaryware and Industries Limited (HSIL), is setting up its second glass container manufacturing plant at Bhongir near Hyderabad at an investment of Rs 210 crore.

The company's present manufacturing plant here has a capacity of 950 million containers per year. It produces over 350 varieties of glass containers and sells them under the 'AGI-glaspac' brand.

HSIL diversified into manufacturing of glass containers through the acquisition of erstwhile Associated Glass Industries Limited in 1981.

"Given the buoyancy in the economy and the consequent demand of high value food, pharmaceuticals and liquor and beer bottles, our customers are experiencing excellent growth and are upbeat about the future prospects.

Moreover, our existing plant in Hyderabad has been operating at full capacity for quite sometime.

Hence, we decided to expand the capacity to 1.6 billion containers per year by setting up our second plant here," D Arun Kumar, president of AGI glaspac, told mediapersons on Thursday.

Major users of glass containers include liquor and beer (40-45 per cent), pharma (22 per cent), softdrinks (21 per cent), and food and cosmetics (7 per cent). Liquor and beer, pharma, food, and cosmetics segments are expected to grow at a rate of 25, 6, 10 and 10 per cent respectively.

The company has already acquired 72 acres and the project will be funded through a mix of internal accruals and debt.

The facility is scheduled to be commissioned in the first quarter of 2009, he added.

AGI glaspac, the second largest glass container manufacturer in the country, next to Hindustan National Glass and Industries Limited, currently enjoys an 18 per cent share of the over Rs 1,200-crore domestic glass container market.

It generates Rs 257.4 crore, accounting for 49.3 per cent of the total revenues of its parent company. It has the largest market share of 65 per cent in south India.

"We expect the second facility to contribute Rs 200 crore a year, besides increasing our market share to nearly 26 per cent. Also, our exports are expected to reach 35 per cent, from the existing 20 per cent, post expansion," Kumar said.